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Helios And Matheson Reports Preliminary Unaudited Results - Expects To Report $422,000 Profit For FY 2012

The Company expects that gross margin will be stable in the range of 21-22% for the fourth quarter of 2012. Selling, general and administrative costs are expected to be $540,000 in the fourth quarter, which would be a decrease of 11% from the previous quarter level in 2012 and an increase of 9% from the fourth quarter of 2011, as a result of the Company's ongoing cost management efforts.

About Helios and Matheson Information Technology Inc

Helios and Matheson Information Technology Inc is a 30 year old IT services organization focused on the banking, financial services, insurance, automotive and healthcare sectors. Its common stock is traded on the Nasdaq Global Market under the ticker symbol "HMNY".

Forward Looking Statements

This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding our expected future financial position, results of operations, cash flows, financing plans, business strategy, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," and other similar expressions are forward-looking statements. All forward-looking statements involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. Factors that may cause actual results to differ materially from those in the forward-looking statements include those set forth in the Helios and Matheson Information Technology Inc. Annual Report on Form 10-K for the year ended December 31, 2011 and more recent reports and registration statements filed with the SEC. Helios and Matheson Information Technology Inc. is under no obligation (and expressly disclaims any such obligation) to update or alter such forward-looking statements, whether as a result of new information, future events or otherwise.

 HELIOS AND MATHESON INFORMATION TECHNOLOGY INC. 
 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME 
 PRELIMINARY AND UNAUDITED 
     
   Year Ended December 31, 
  2012 2011
  (unaudited)  
     
Revenues  $ 12,368,920  $ 12,203,990
Cost of revenues  9,582,191  9,677,939
Gross profit  2,786,729  2,526,051
Operating expenses:    
Selling, general and administrative  2,266,666  2,290,646
Depreciation and amortization  14,092  23,928
   2,280,758  2,314,574
Profit from operations  505,971  211,477
Other income (expense):    
Early lease termination fee  (82,548)  -- 
Interest income  9,425  3,669
   (73,123)  3,669
Profit before income taxes  $ 432,848  $ 215,146
Provision for income taxes  11,155  12,243
Net Profit  421,693  202,903
Other comprehensive (loss)/income - foreign currency adjustment  (20,978)  (16,070)
Comprehensive income  $ 400,715  $ 186,833
     
     
Basic and diluted profit per share   $ 0.18  $ 0.09
     
 
HELIOS AND MATHESON INFORMATION TECHNOLOGY INC.
 CONSOLIDATED BALANCE SHEETS
PRELIMINARY AND UNAUDITED
     
  December 31, 2012 December 31, 2011
  (unaudited)  
ASSETS    
Current Assets:    
Cash and cash equivalents  $ 2,861,733  $ 1,998,158
Accounts receivable- less allowance for doubtful accounts of $32,421 at December 31, 2012, and $77,590 at December 31, 2011  1,257,488  1,665,553
Unbilled receivables  21,490  46,408
Prepaid expenses and other current assets  130,571  83,326
 Total current assets  4,271,282  3,793,445
Property and equipment, net  52,717  20,685
Security Deposit  1,000,000  1,000,000
Deposits and other assets  100,032  142,673
 Total assets  $ 5,424,031  $ 4,956,803
     
LIABILITIES AND SHAREHOLDERS' EQUITY  
Current Liabilities:    
Accounts payable and accrued expenses  $ 1,171,249  $ 1,104,736
     
 Total current liabilities 1,171,249 1,104,736
     
Shareholders' equity:    
Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued and outstanding as of December 31, 2012, and December 31, 2011  --   -- 
Common stock, $.01 par value; 30,000,000 shares authorized; 2,330,438 issued and outstanding as of December 31, 2012 and as of December 31, 2011  23,304  23,304
Paid-in capital  37,855,740  37,855,740
Accumulated other comprehensive (loss)/income - foreign currency translation  (46,910)  (25,932)
Accumulated deficit  (33,579,352)  (34,001,045)
Total shareholders' equity  4,252,782  3,852,067
Total liabilities and shareholders' equity  $ 5,424,031  $ 4,956,803
 
 
HELIOS AND MATHESON INFORMATION TECHNOLOGY INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
PRELIMINARY AND UNAUDITED
     
  Year Ended December 31,
  2012 2011
  (unaudited)  
Cash flows from operating activities:    
Net profit  $ 421,693  $ 202,903
Depreciation and amortization  14,092  23,928
Provision for doubtful accounts  (45,169)  (135,034)
Gain on Sale of Fixed Assets  (2,488)  -- 
Changes in operating assets and liabilities:    
Accounts receivable  453,234  692,933
Unbilled receivables  24,918  (46,408)
Prepaid expenses and other current assets  (47,245)  (13,680)
Deposits  42,641  (2,970)
Accounts payable and accrued expenses  66,513  (344,396)
Deferred revenue  --   (19,504)
Net cash provided by operating activities  928,189  357,772
     
Cash flows from investing activities:    
Net Purchase of property and equipment  (43,636)  
Net cash used in investing activities  (43,636)  --
Effect of foreign currency exchange rate changes on cash and cash equivalents  (20,978)  (16,070)
Net increase in cash and cash equivalents  863,575  341,702
Cash and cash equivalents at beginning of period  1,998,158  1,656,456
Cash and cash equivalents at end of period  $ 2,861,733  $ 1,998,158
     
Supplemental disclosure of cash flow information:    
Cash paid during the period for interest  $ --  $ --
Cash paid during the period for income taxes, net of refunds  $ 5,936  $ 5,350
CONTACT: Umesh Ahuja
         703 691 0400 Ext 1046
         uahuja@hmny.com

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